Critique the three following audit programs for cash examples.

Prepare a well written 2 to 3 page paper. Answer the following questions to complete the critiques. 1 page per program.

-How well did each program address the assertions?
Existence and occurrence
Rights and obligations
Completeness

Cutoff
Valuations, allocation, and accuracy
Presentation and disclosure

Did any of the audit programs provide clear descriptions of the assumptions?

How were the risks identified? Was the list of risks complete?

What were your thoughts on the objective of the audit?

How would you assess the scope of the audit?

How would you assess the quality and completeness of the analytical procedures?

What positive and negative confirmations were identified?

How would you assess the completeness of the risk assessment procedures?

How would you assess the quality and completeness of the tests of controls?

How would you assess the quality and completeness of the substantive procedures?

Did the audit program adequately address internal controls?

Rank the audit programs in letter order with A being the best, B next, etc.

Identify the deficiencies in each of the three audit programs.

PSC

Cash Audit Program #1.

Company Balance Sheet Date 12/31/2014

Audit Objectives	Audit Procedures for Consideration	N/A Performed by	Workpaper Index
	FINANCIAL STATEMENT ASSERTIONS E/O Existence or occurrence. V/A Valuation or allocation. C Completeness. P/D Presentation and disclosure. R/O Rights and obligations.
	AUDIT OBJECTIVES A. Cash exists and is owned by the client (assertions E/O and R/O).
	B. Cash balances reflect a proper cutoff of receipts and disbursements (assertions E/O, C, and V/A).
	C. Cash balances as presented in the balance sheet properly reflect all cash and cash items on hand, in transit, or on deposit with third parties (assertions E/O, C, and P/D).
	D. Cash balances are properly classified in the financial statements, and any restrictions on the availability of funds are properly disclosed (assertions R/O and P/D).
	BASIC PROCEDURES
A	1. Using the standard AICPA bank confirmation form, request confirmation as of the audit date for each bank account. Also request confirmation of material cash in savings institutions, certificates of deposit, and compensating balances. Retain copies of all confirmations in the workpapers. Mail second requests if necessary.
	¯ Normally, account numbers or certificate of deposit numbers to be confirmed should be listed. Bank account numbers are often incorrectly listed, thus you may want to check these before mailing.
	2. Determine those bank accounts for which subsequent period cutoff bank statements may be necessary and request from the bank(s) by letter that such cutoff statements be mailed directly to our (auditors’) post box.
	¯ If possible, procedures that use cutoff bank statements should be timed to allow the return of the statement without interruption of the client’s normal operations.
A, B, C, [D]	3. Obtain copies of each account’s bank reconciliation for the workpapers and perform the following procedures:
	a. Trace the bank balance on the reconciliation to the standard bank confirmation received from the bank (or the balance per bank statement for any accounts not confirmed).
	b. Trace the reconciled book balance to the general ledger, trial balance, or lead schedule as applicable.

PSC Audit Program for Cash

Cash Audit Program #2

Audit Scope: All cash and cash equivalents at PSC as of December 31, 2014.

Audit Objectives: To ensure that cash is properly recorded.

Risks

• Cash transactions may not be recorded accurately.
• Cash may not exist.

Audit Procedures

Done by

Date

W/P Ref

1. Confirm selected bank accounts.

2. Review Confirmation replies

3. Test Bank reconciliations.

PSC Audit Program for Cash

Cash Audit Program #3

Audit Objectives: To ensure that cash is properly recorded.

Risks

• Cash transactions may not be recorded accurately.
• Cash may not exist.

Audit Procedures	Done by	Date	W/P Ref
Obtain analysis of cash balances and reconcile them to the general ledger.
Confirm cash balances with financial institutions.
Obtain reconciliations of bank accounts with the general ledger accounts.
Obtain bank cut-off statements at year-end.
Analyze bank transfers at year-end.
Review payments to related parties.

Answer rating: 100% (QA)

Critique 1 Existence and Occurrence This audit program addresses the assertion of existence and occurrence by requiring confirmation of the bank accounts as well as the material cash in savings instit... View the full answer